Question
UPSC Prelims 2014 Question:
What does venture capital mean?
Answer (Detailed Solution Below)
Option 2: A long-term start-up capital provided to new entrepreneurs
Detailed Solution
Explanation:
- Venture capital (VC) is a form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.
- Venture capital generally comes from well-off investors, investment banks, and other financial institutions.
- However, it does not always take a monetary form; it can also be provided in the form of technical or managerial expertise.
- Venture capital is typically allocated to small companies with exceptional growth potential, or to companies that have grown quickly and appear poised to continue to expand.
Therefore, option (2) is the correct answer.
Subject: Economics | Industry
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